The death of Richard Holbrooke, the US special envoy for Afghanistan and Pakistan, will have an unpredictable impact on US policy in the region and could open the door to a greater peace-brokering role for the United Nations, observers and diplomats said today.

As plaudits flooded in from around the world for the diplomatic veteran of Vietnam, the former Yugoslavia and Afghanistan, Barack Obama's administration was struggling to reshuffle its team on the eve of a long-awaited Afghan policy review.

The loss of a strong-willed heavyweight could unblock an impasse that hobbled Washington's capacity to make decisions on Afghanistan, European diplomats said. It was harder to predict what course US policy would take once the dust had settled.

Holbrooke was a fervent supporter of a political solution to the Afghan conflict. His last words to his Pakistani surgeon, according to the Washington Post, were: "You've got to stop this war in Afghanistan." However, his advocacy did not result in a wholehearted US commitment to talks with the Taliban. Instead, such contacts were left to President Hamid Karzai to pursue in secret and a cluster of would-be peacemakers pursuing unco-ordinated initiatives.

Although his job was supposedly to co-ordinate Afghan policy for the whole of the US government, Holbrooke was only ever one voice among many in Washington. He was directly appointed by President Obama, but lost the confidence of the White House a few months after some well-publicised spats with Kabul and President Hamid Karzai, in particular. The blunt style that helped push Slobodan Milosevic into a peace agreement over Bosnia in 1995 was rejected as arrogance in Afghanistan.

"The White House viewed him as a spent force and wanted to sideline him," a friend of Holbrooke's said. But he hung on, under the protection of the secretary of state, Hillary Clinton. It was a political alliance built on loyalty – Holbrooke had stuck to her presidential campaign until its bitter end in 2008 – but they did not share the same approach to Afghanistan.

"Hillary sided with the generals who told her the military campaign would work in the end," said a former diplomat. She agreed with the secretary of defence, Robert Gates, and General David Petraeus, the US commander in Afghanistan, that the Taliban would negotiate in earnest only after they had been subjected to months more of drone air strikes and special forces raids. She also wanted to ensure that when back-door contacts were begun with the Taliban they were well organised and under full US control.

Like Holbrooke, Douglas Lute, the White House "war czar", is deeply sceptical about the efficacy of the Nato military campaign in Afghanistan and is an advocate of talks, according to US sources. But personal animosity and differences in style prevented the two men from co-operating.

"Lute found Holbrooke too much of a block on creative thinking, while Holbrooke thought Lute's ideas were not grounded in reality," one source said.

In particular, the two men were at loggerheads over a plan to create a new UN peace envoy whose job would be to sound out the Taliban and Aghanistan's neighbours on a political settlement.

The job description for such an envoy has been put together by a UN veteran and retired Algerian diplomat, Lakhdar Brahimi, in consultation with western and regional governments. Earlier this year Lute flew to Paris to discuss US backing for such an initiative, but the proposal was subsequently blocked by Holbrooke, Petraeus and Staffan di Mistura, the UN representative in Kabul, who argued that any such work should come under his authority. The UN is now working on setting up a more modest peace effort, known as the "salam group" within di Mistura's office. But some diplomatic sources said that following Holbrooke's death the idea of a specialised UN peace envoy could be revived. The opportunity for a rethink could come with the publication of a recommendation early next year by a "task force on Afghanistan" headed by Brahimi and a retired US diplomat, Thomas Pickering.

Much will depend on who takes the lead in US policy-making in Holbrooke's wake, said Sir Sherard Cowper-Coles, Holbrooke's former British counterpart as special envoy for Afghanistan and Pakistan.

"What happens now will depend in large part on which way the president and Mrs Clinton jump in choosing Richard's successor, and in empowering him or her," Cowper-Coles argued. "They have a clear choice between continuing to pursue a largely military 'strategy' that can at best suppress some of the symptoms of the disease, or adopting the 80% politics approach … that offers the only real hope of tackling a disease that is, as Holbrooke knew so well, primarily political, social and economic in its origins."

The Taliban claimed yesterday it was the stress of the Afghan campaign that had left a "lethal dent on Holbrooke's health". It may not be clear for a while whether his death with have a similar impact on Afghan hopes of peace.